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Boosting disabled employment

10 November 2016

In 1998, as a new Minister, I took on responsibility for the New Deal for Disabled People. We knew that the great majority of people out of work on health grounds wanted a job. For the first time, Government committed seriously to new ideas to help. Many were experimental. But the disability employment gap was steadily reduced.

In 2011, the Coalition scrapped the New Deal and introduced its Work Programme. It dealt with all jobseekers, whether available for work and claiming Jobseekers Allowance (JSA) or out of work on health grounds and claiming Employment and Support Allowance (ESA). Reduction of the disability employment gap came to a halt. The graph shows how badly ESA claimants fared:

The National Council of Voluntary Organisations commented in July that the Work Programme “has largely failed those with more complex needs or barriers to employment. For many charities, it has provided an abject lesson in how not to outsource public services, particularly for vulnerable people.”

The Conservatives’ 2015 Election Manifesto adopted the target – proposed by Scope in 2014 – of halving the disability employment gap. There is, however, no sign of measures to deliver so ambitious an aim. Further proposals are expected before the end of 2016. They will be keenly scrutinised to see if they can meet the challenge.

I believe four steps are needed.

Separate provision for people claiming ESA

Labour’s 2015 election manifesto proposed “specialist support … to ensure that disabled people who can work get more tailored help.” Supporting JSA and ESA claimants in the same programme has failed. Evidence from Australia suggests that programmes focused on disabled people do better for disabled people than those which try and support everyone.

A localised approach

Huge regional Work Programme contracts have squeezed out good, local organisations with specialist expertise. Contracting and, progressively, commissioning should instead be carried out locally. Local authorities, colleges, local employers and the NHS should be round the table. That kind of integration is feasible locally. It isn’t feasible in Whitehall.

Benefit reform

In two years, Employment and Support Allowance will be ten years old. It will be time for a thorough review.

Contributory ESA is paid – irrespective of other household income – to claimants who have been in recent paid work. The Coalition introduced a twelve months limit. After a lifetime of work, someone unemployed on health grounds who has a spouse with a very modest income now gets no benefit at all after twelve months. This is unfair, and penalises work. Contributory ESA should be payable for at least two years.

Direct support for employment

Labour’s 2015 election manifesto proposed “a guaranteed, paid job for all young people who have been out of work for one year, and for all those over 25 years old and out of work for two years”. The proposal was inspired by the success of the job guarantee offered to young people in Labour’s Future Jobs Fund in 2009-10. A six months wage subsidy ensured sufficient jobs were available. A similar initiative could increase the jobs available to ESA claimants. An incoming government should pilot a variety of approaches, focusing on subsidising employer support rather than wages.